KALAMAZOO — The city of Kalamazoo intends to sue the Kalamazoo Gazette for about $4 million the city argues the publication
owes in tax breaks and other incentives related to a 2002 expansion.

City officials have said the Gazette must
refund the money because it broke agreements with the city when it
stopped printing the newspaper at its downtown operations in March 2010
and laid off about 60 workers. The distribution operation is still in
Kalamazoo, as are news, advertising and some regional marketing, design
and niche publication staffs.

The city's Brownfield Redevelopment Authority was expected today to authorize the city attorney to file a lawsuit against
the Gazette over a $387,166 reimbursement the authority paid the Gazette for environmental work on its property at 401 S.
Burdick St., according to a memo from Jerome Kisscorni, the city's director of economic development.

On Monday, the Kalamazoo City Commission is expected to authorize the city attorney to file a second lawsuit against the Gazette
for at least $2.5 million in property tax breaks the Gazette collected prior to transferring its printing and packaging to
Walker, according to the commission's Feb. 21 meeting agenda.

Jim Stephanak, the Gazette's publisher, declined to comment until he sees the lawsuits, which have not been filed.

Kisscorni has said city officials believe they
could charge the Gazette more than $4.6 million in "clawbacks" related
to breaching 2001 incentive agreements. The amount was based on
repayment of all abated taxes and reimbursements, plus interest,
penalties and future taxes.

According to a memo with the commission agenda, the city could charge the Gazette about $3.7 million in property-tax clawbacks.

Tax breaks on $20 million of new equipment were granted to the Gazette for six years and expired in 2008. The real estate
investment, expanding the building at Lovell and John streets, was abated over 12 years and was set to run through 2014. Last September, the city acted to revoke the abatement, which is no longer in effect.

"Those efforts included an unsuccessful facilitated mediation — as such, both the city and BRA have no other choice but to
pursue lawsuits to recoup the monies owed by the Gazette," the memo states.

The Gazette consolidated its printing and
packaging operations at a company facility in Walker. The press and
packaging equipment in Kalamazoo was decommissioned but remains in the
Gazette's downtown building.